Pressure to keep coal power for Asia’s energy security

Relying heavily on oil and gas imported from the Middle East, the recent conflict in this region has caused many Asian countries to witness supply contraction and rising prices.

As negotiations to end hostilities between the US and Iran continue to drag on, many countries are promoting nuclear power development and pledging to expand renewable energy. However, they also increased coal thermal power production and investment to create a “buffer zone” in times of crisis.

Mr. Sandeep Pai, an expert at the Nicholas Institute for Energy, Environment and Sustainable Development at Duke University, said Asian countries have recently made efforts to phase out coal, gradually to cut emissions and improve air quality.

However, the conflict changed this course. “Ultimately, energy security still takes priority over all climate considerations,” Mr. Pai said.

In East Asia, South Korea and Japan have increased coal-fired power generation to maintain national grid stability, as the closure of the Strait of Hormuz disrupted oil and gas supplies to Asia.

These two countries have to import almost all of their energy needs, mainly through the Strait of Hormuz. Faced with the risk of shortages during the war period, South Korea delayed plans to close three coal power plants.

Southeast Asian countries have similar moves. After the conflict broke out, the Philippines increased coal-fired power generation and declared an energy emergency. The government once considered lifting the ban on new coal power plant construction but ultimately kept it in place, although previously approved projects continued to be implemented.

Indonesia, the world’s largest exporter of thermal coal, has seen coal prices rise to their highest level in many years. The country is amending trade regulations and imposing new taxes on this item.

In South Asia, India plans to spend $3.9 billion to convert coal into fuels and industrial chemicals, to replace imports, thereby maintaining coal’s role in the economy.

In 2021, the United Nations declared that coal had “become a thing of the past” after nearly 200 countries pledged to gradually phase out coal power. However, the Ukraine conflict broke out in 2022, causing gas supply disruption, many European countries have returned to using more coal, and built more pipelines and ports to import fossil fuels.

Now, the second energy shock in less than a decade continues to strengthen coal’s role in energy security in Asia, according to Michelle Manook, CEO of FutureCoal – the fossil fuel industry-backed organization formerly known as the World Coal Association.

The International Energy Agency (IEA) forecasts that global investment in coal will reach $180 billion in 2026, the highest since 2012. According to Global Energy Monitor, global coal power output decreased by 0.6% last year, but new plant capacity still increased by 3.5%. Mr. Pai predicted that Asia’s emergency response measures are gradually being transformed into long-term policies, capable of extending the life cycle of coal power.

It is not yet possible to escape dependence on coal, but Asia is also actively investing in nuclear and renewable power. South Korea is increasing output from nuclear power plants and speeding up maintenance work to soon bring five decommissioned reactors back into operation.

According to Ms. Michiyo Miyamoto, expert at the Institute for Energy Economic and Financial Analysis (IEEFA), Japan is currently promoting the restart of nuclear power plants that were stopped after the Fukushima disaster in 2011. After this incident, Japan was forced to increase the use of coal when the national electricity generation capacity temporarily decreased by one-third.

In Southeast Asia, solar power is increasingly popular. Vietnam sets an annual goal of having about 10% of public offices and 10% of households across the country install and use self-produced and self-consumed rooftop solar power. Meanwhile, Filipinos are rushing to install rooftop solar power at a record pace.

Ms. Brenda Valerio, representative of the non-profit organization New Energy Nexus, commented that the process of diversifying supply sources to ensure energy security does not erase the achievements of green transition. “But it shows that this is a bumpy process and there are always many controversies,” she said.

Similarly, Luke Holt, Asia-Pacific energy director of consulting firm Ramboll, said that efforts to cut emissions and achieve the net zero emissions target are long-term strategies, requiring continuous pursuit for many years.

“We find that these plans are easy to distract. There have been too many shocks that have interrupted the decarbonization roadmap,” he assessed.